BOCOM INTL: The new round of government subsidies is expected to drive an increase in battery equipment installation volume.

BOCOM INTL has released a research report stating that looking ahead to 2025, benefiting from the new round of policies on trading in old for new consumer goods, subsidy scope will be further expanded, with the penetration rate of new energy vehicles expected to increase to 60% in 2025. This is likely to drive the growth of power battery installation volume. In terms of energy storage, due to China's strong promotion of large-scale storage and the new round of grid renovation in the United States, it is expected that the sales volume of energy storage batteries will continue to grow strongly in 2024, with further room for improvement in the proportion of energy storage exports. Additionally, the industrialization process of solid-state batteries is accelerating in 2024, with some car makers and battery companies planning to mass produce solid-state batteries. This is expected to drive the upgrade and iteration of the material system, benefiting the solid-state electrolyte, positive and negative electrodes, porous copper foil, aluminum-plastic film, and other related industrial chains. Benefiting from the growth in sales of new energy vehicles, the installed volume of power batteries in 2024 increased by 41.5% year-on-year, with lithium iron phosphate batteries showing strong growth, accounting for over 74% of installations. The cumulative sales volume of new energy vehicles in 2024 was 10.89 million units, up by 40.7% year-on-year, with a penetration rate of new energy vehicles reaching 49.4%, an increase of 9.1 percentage points compared to the same period last year. According to the China Automotive Power Battery Industry Innovation Alliance's official account, the cumulative installed capacity of China Shipbuilding Industry Group Power batteries in 2024 reached 548.4GWh, an increase of 41.5% year-on-year. Among them, the installation of ternary batteries was 139.0GWh, an increase of 10.2% year-on-year, accounting for 25.3% of the total installation volume; while the installation of lithium iron phosphate batteries was 409.0GWh, an increase of 56.7% year-on-year, accounting for 74.6% of the total installation volume, an increase of 7 percentage points year-on-year. In 2024, China Shipbuilding Industry Group Power achieved a high year-on-year growth in battery production and sales, with strong growth in energy storage exports. The total battery production in China in 2024 was 1,096.8GWh, an increase of 41.0% year-on-year, while battery sales reached 1,039.5GWh, an increase of 42.4% year-on-year, maintaining the production-sales ratio at 1.06, which is consistent with 2023. In terms of exports, China's battery exports in 2024 reached 197.1GWh, an increase of 29.2% year-on-year, accounting for 19.0% of sales in 2024. Among them, the export of energy storage batteries outperformed that of power batteries, with a year-on-year growth of 5.0% for power batteries, and 151.6% for other batteries such as energy storage, accounting for 32.2% of total exports (vs. 16.5% in 2023). The Tesla Shanghai Gigafactory for energy storage has passed the acceptance inspection, with production expected to start in the first quarter of 2025. The Tesla Shanghai Gigafactory for energy storage started construction in May 2024 and passed the acceptance inspection in December 2024. It is planned to produce 10,000 units of commercial energy storage battery Megapack annually, with an energy storage capacity of nearly 40GWh. The energy storage Gigaf :Contemporary Amperex Technology300750.SZactory will be an important production and export base for Tesla globally, and its completion and operation will help alleviate the current supply-demand contradiction of Megapack. Individual stocks: It is recommended to pay attention to Contemporary Amperex Technology (300750.SZ), which has cost and technological advantages, as well as a leading layout in overseas markets.